Enterprise software specialist TIBCO Software (NASDAQ:TIBX) is set to report first-quarter earnings Thursday evening. Considering the competitive atmosphere in the company's particular niche, TIBCO is too much fun to pass over, so here's the lowdown on today's service-oriented architecture (SOA) world.

What analysts say:

  • Buy, sell, or waffle? Seventeen Wall Street firms follow TIBCO. Eight of them want to buy, and the other nine are holding. One hundred and seventeen Motley Fool CAPS ratings boil down to a four-star grade.
  • Revenues. $128 million would satisfy the average analyst, 12% above the $114.6 million of net sales a year ago in a seasonally slow quarter.
  • Earnings. The average forecast calls for $0.07 per share, up from the $0.06 of pro forma EPS last year.

What management says:
TIBCO no longer provides quarterly guidance, for some very Foolish reasons. In the words of CFO Murray Rode, "given the pronounced seasonality that is a fact of life for our business, we're most focused on our full-year results which experience is teaching us is the more natural period of measurement for our business and therefore we expect greater variability in any given quarter, and this is especially true for the first quarter. Overall our outlook for the year is positive, optimistic, and confident." Bravo.

For the full year of 2007, and for several years beyond that, management expects 10%-15% annual revenue growth. Their earnings goal is to hit 15% higher earnings per share every year for the next several years.

What management does:
Gross margins are widening, along with the free cash flow ratio. Operating expenses shot up significantly in the latest quarter, mostly because of new hires in the sales department and generous annual salary increases. That filters down to the bottom line as well, but we're looking at more of a bumpy ride than a free-falling trend here.

After a bit of a dip, revenue growth appears to be back on track. As for earnings growth, TIBCO has been up against some tough year-ago comparisons lately -- but this quarter should be a cakewalk.

Margins

9/2005

11/2005

2/2006

5/2006

9/2006

11/2006

Gross

72.4%

72.2%

71.8%

72.9%

73.3%

74.6%

Operating

14%

13.9%

13.3%

15.3%

15.5%

16.8%

Net

14.7%

16.3%

14.9%

14.8%

13.8%

14.1%

FCF/Revenue

17%

15.2%

16.3%

13.6%

19.2%

18%

YOY Growth

9/2005

11/2005

2/2006

5/2006

9/2006

11/2006

Revenue

30.7%

15.2%

9.4%

8.9%

12.2%

16%

Earnings

87%

61.5%

44.9%

19.7%

5.8%

0.4%
All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ended in the named months.

One Fool says:
If you've been following the ongoing Oracle (NASDAQ:ORCL) versus SAP AG (NYSE:SAP) saga lately, you might want to keep an eye on TIBCO too. On the latest earnings call, one analyst asked whether Oracle Fusion is taking any business away from the TIBCO SOA platform.

CEO Vivek Ranadive flatly said that he hasn't seen it. "We see SAP in Europe, but very little of Oracle. It is not zero, but very, very little." And so, the main competition remains IBM (NYSE:IBM) and BEA Systems (NASDAQ:BEAS).

You'll hear a lot more about this five-way SOA rivalry over the next few years, as plucky pioneer TIBCO grows up and the four giants aim to build out their SOA platforms further.

Would you believe that TIBCO outranks all of its gigantic rivals with its four CAPS stars? Weigh in on TIBCO, Oracle, IBM, or any company you like -- it's fun, free, and helps us all beat the market.

Fool contributor Anders Bylund holds no position in any of the companies discussed here. You can check out Anders' holdings if you like, and Foolish disclosure is always cutting-edge.